RCom rejigs debt to exit SDR with zero write-off

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Building on an earlier plan announced in October, RCom, which is backed by billionaire businessman Anil Ambani, said the new scheme would involve no write-offs by lenders or bondholders, nor conversion of debt to equity.

Reliance Communications Chairman Anil Ambanion presented a revised debt resolution plan on Wednesday aimed at reducing the company's liabilities from 450 billion rupees ($7 billion) to 60 billion rupees by March 2018 by withdrawing the company from the consumer wireless business and unloading assets, including real estate.

"We have achieved full resolution for Reliance Communications".

Shares of Reliance Communications extended gains for the second straight session and rose almost 25% to a six-month high after the company exited the strategic debt restructuring scheme. It will be run with a capital-light approach with a debt of under Rs 6,000 crore.

As part of Tuesday's plan, RCom will shift 100 billion rupees of its debt into a special goal vehicle that will develop the company's real estate assets in the suburbs of Mumbai.

Anil Ambani-led Reliance Communications (RCom) on Tuesday has finalised a new resolution plan to reduce its huge debt by up to Rs 39,000 crore through prepayment.

Ambani claimed the plan involves an eight-stage asset monetisation process under an oversight committee headed by former RBI deputy governor S S Mundra with members from Trai and the entire process will be completed in 40 days.

Jio which made a disruptive entry in the telecom market with free voice calls and data at throwaway prices, and triggered a consolidation wave is also in the race to buy some of RCom's assets.

The company, he said, will come on-board with a strategic investor but did not divulge the name of the new investor.

The younger Ambani scion's sudden announcement and the alacrity with which the lenders accepted the plan has only fuelled rumours of a rescue operation mounted by Mukesh Ambani and his telecom giant Reliance Jio. "Bidders can bid for different frequencies in different circles", Ambani said, adding that on completion of the deals "Reliance Communications will have an enterprise value of 150 billion rupees".

R-Com has already announced plans to close down its 2G telecom service.

Jio is now left with Airtel, Idea-Vodafone (which are getting merged) and BSNL to compete in the Indian telecom market.

The "no-loan write-off" plan also involved repaying of up to Rs 17,000 crore loans out of proceeds from monetisation of spectrum, tower and fibre assets.

The promoters are looking for co-developers for RCOM's Dhirubhai Ambani Knowledge City campus that comprises of over 125 acres of real estate in New Bombay.

On a consolidated basis, RCom reported a net loss of Rs 2709 crore in Q2 September 2017, compared with net profit of Rs 62 crore in Q2 September 2016.

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